<div>NTPC has agreed to pay outstanding bills of over Rs 2,000 crore to Coal India in instalments, according to sources. This marks a thaw in the ongoing cold war between the two public sector organisations. They came to blows after NTPC alleged losses of Rs 11,000 crore due to ‘poor quality’ coal supplied by Coal India. Two months ago, NTPC stopped payments to Coal India and Coal India, in turn, stopped supplies.<br /><br />NTPC refused to comment on the outstanding payments but confirmed that quality issues are being addressed. CIL says NTPC has dispatched the first installment of Rs 170 crore.<br /><br />If the CIL claim is to be believed, the staunch stance of NTPC dismissing the overdue payments has amounted to nothing. Earlier, this year dust was thrown up when NTPC refused to pay Rs 2,839 crore for the coal supplied to them from coal India’s subsidiary Eastern Coalfields and claimed a loss of Rs 11,000 crore because of the poor quality coal.<br /><br /><span style="color: rgb(255, 0, 0);"><strong>Read Also</strong></span><strong>: <a href="http://businessworld.in/en/storypage/-/bw/coal-india-may-cut-supplies-to-ntpc-as-quality-row-escalates/r848804.0/page/0">Quality Row Between Coal India, NTPC Escalates</a></strong><br /><br /> At the time CIL stopped supplying coal impacting power production in 16 states, NTPC was seeking support from other utilities to showcase the poor quality of coal. “We did not get the fuel we were being charged for and do not view that as outstanding bill,” explained the NTPC spokesperson. <br /><br />In April, the Central Institute of Mining and Fuel Research (CIMFR), Dhanbad was engaged to assess the coal quality of the disputed mines that supply to NTPC. The coal from the mines sampled is supposed to be between G-10 and G-13 in terms of heat value. NTPC has said the supplies were of much inferior quality and paid ECL at the rate of lowest rank coal (G-17) thus accumulating the Rs 2,000+ crore outstanding payment. <br /><br />According to the coal producer, after weeks of third party sampling it was found that in 60 per cent dispatches, coal quality fell short by one grade, while in close to 30 per cent of the instances, quality was as promised. A large variation in coal quality was noticed only in 10 per cent of the samples. “The sampling results show that large variations are not the norm and are due to natural causes,” explained Neeladhari Roy, general manager for Eastern Coal fields.<br /><br />Said Roy, “NTPC has agreed in principal to pay the due amount but in installments.” The coal quality variations were pegged down to natural causes like moisture loss etc. The third party sampling was carried out last month and NTPC is verifying the results in its own lab.<br /><br />Though NTPC refused to comment on the outstanding payment, the company spokesperson said the two have ironed out their differences and are on a path of reconciliation. Additionally, after the ministry’s letter to the PMO on June 18 regarding 69 unsigned FSAs of which 28 belong to NTPC and its joint ventures, there are chances of the agreements being finalised soon. By the end of this week, the agreements are expected to be signed and stamped. The question of fuel quality is to be taken care of through joint sampling at the loading as well as unloading points. At present, fuel is being supplied as per a memorandum of understanding and is charged as per the gross calorific value slabs announced in 2011-12.<br /><br />The tiffs between the two maharatna companies have farflung and long lasting impacts but this time around one ought to be grateful that it took just a few months to reach a resolution unlike the 10-year-long legal battle between the two on the Karanpura mines in Jharkhand.<br /><br /><br />mmatbworld(at)gmail(dot)com</div>
